US Economy and hopes of a turnaround?

Question

With the Presidents speech today, it is certain that tough times are ahead. Also take into consideration that today's economy mirrors that of the early mid-80's. Inflation which leads to recession, although our government says that no recession yet. (Look at the increase of alcohol and drug use. Instead of crack it's meth.) How long do you think before we turn around. I.E., home sales, food, domestic energy? How long before we are able to feel comfortable and not have to save 35% of our checks in anticipation of economic fallout? Oil will never go back so let's leave oil out of this.

Answer 1

I think it will take at least several years for the US economy to recover.  

One of the main problems is that USA has been living beyond its means for a number of years now by selling assets and borrowing money from foreigners.  And there is only so much debt a country can accumulate before this debt becomes too expensive to maintain in terms of the interest payments and profits taken out of USA by foreigners.

Every month USA has a $60 billion trade deficit with other countries.  Which means that USA borrows this much money every month to buy things from other countries.

Some time in not too distant future USA will have to stop borrowing so much money.  And if USA cuts back its consumption by $60 billion per month.  Then the US standard fo living may go down 5% to 10%.  And if USA starts repaying the debts it has accumulated.  Then US standard of living may go down even more.

These cut backs in overspending don't have to happen today or tomorrow.  But eventually they will have to happen.  Which means that US standard of living eventually may go down and stay down for a long time, until the biggest debts are paid off.